tv Squawk Box CNBC October 8, 2012 6:00am-9:00am EDT
it is columbus day and many schools and businesses are closed across the country. no bond rating today, but the equity markets are open. the futures by the way are slightly lower. dow futures down by about 52 points. s&p 500 futures off by about close to 5 1/2. a lot of some of the concerns around the globe. we'll talk about the bulls and bears coming up with jeff rosenburg. he's black rock's chief investment strategist for fixed income. also equity strategist at miller taback. also carly fiorina will talk about the fresh money coming in for the romney campaign. all that plus states and cities turning to gambling to make up budget shortfalls. we'll bring you a new casino opening up in the battleground state of ohio. first let's get you up to speed on the other top stories.
andrew, welcome back. >> good morning. it was decision 2012 in venezuela this weekend. hugo chavez has been reelected. he beat out by a 54-45 margin. in 2006, he won by 27 points. swreker to gives chavez a fresh endorsement of his socialist asian world bank saying brace for slower growth. lowest pace of growth since 2001. and that's predominantly due to the region's exposure to china. and finally, a u.s. congressional committee set to recommend blocking china's big
telecom equipment maker from expanding in american markets. leaked report says that there are security risks. >> codo we trust the chinese? >> if you were looking there, i would find another vendor if you care about your indiatakellectu property and the national security of the united states of america. >> that report was something. the full report set to to be released at 10:00 a.m. eastern today. the move comes as they're considering a public offering. and joe has more headlines. >> the leaves are changing color. east coast starting to feel the chill of autumn.
that could only mean earnings season are upon us. i'm not sure why my headlines aren't exciting enough or ominous enough for the new music, but apparently they're not even though earnings are not expected to be that great. so you would think maybe i would have some music with my read here. there it goes. >> i'm even getting sick of it at that point, sorry. >> it's not going to be a good earnings season and i don't get the music. alcoa will report -- these earnings are up in the air. alcoa earnings coming after the close tomorrow. predicting s&p 500 results will cr drop 2.6%. that would snap 11 straight quarters of gain, hence the
worry, the tension, the anxiety of the companies that have issued guidance 78 have warned. but it may not be all that bleak. always seems to be better than people think. on average 72% of companies have beaten analysts over the past four years. so 72%, they know how to do this. governor jerry browns has ordered state plugs regulators to let gas stations start selling winter blend fuel. that will help ease hopefully record high gasoline prices. regular price hit $4.66 a balance and topping $5 in some area hes. winter blend gas is cheaper to make than summer grade. processed to produce less smog. great thing about california,
most of the time you're not moving. you're just sitting there at $5 a gallon. >> the lundberg survey says national prices rose less than half a cent over the past two weeks. you didn't play the music if it's less than half a percent. that's less foreboding. it was $3.83 a gallon -- you don't want to make fun of the music p about. >> the viewers wrote in and decided they didn't like it. >> many regions outside of california seen a decline in prices. >> i like that there's some music. >> i think it may be too loud and a little too ominous.
>> nothing will spoil on your parade. >> rutgers 5-0. >> how about that notre dame game. no idea. no idea. >> i know about the giants. >> that was a good situation. yankees won. >> giants i care about did not win. they got their ass kicked twice. >> your reds, though, won. >> that's what i just said. the giants i care about got their ass kicked twice. and then maybe one more time -- it will happen in cincinnati hopefully on tuesday. that's a game i can watch p. >> if they get there, will you go? >> to the world series? i guess it would depend on -- probably not. who are they playing? >> giants right now. but you're saying in the world -- >> i hope it's the yankees. >> if it was in new york, then
you would have a shot. >> that would be on exciting. be like all the way back to 76 or 77, 76, i think. >> you're probably jet lagged, aren't you? when did you get back? >> friday. 24 hours. i missed everything. jobs. the debates. i did see the debates and i saw -- i watched everybody here from paris doing the jobs number. >> missed a you new kind of greek cookie. but you heard, becky is right, beware of greeks bearing gifts. she brought a bunch of stuff in here and lulled us into -- >> fatten you up very quickly.
>> like a pound of butter in every piece. you could use a little. you look thin. >> i was eating out of control actually. >> the true 1%er can pronounce crossiant. >> but nothing else. >> 54-45, they're the same number, aren't they? >> on chavez. it's an issue. >> let's get a check on the markets. we are looking at some red arrows. story in the financial times talking about there is a global recession out there. u.s. may be defying that, but they're seeing a lot of negative signs around the globe. world bank sharply down grading expectations for growth in china. european markets are lower. there are new concerns about
greece, about spain, a and that will take front and center stage this week. merkel is headed to greece. and next week a big meeting of many of the eu ministers. so you'll see a lot of concerns about what's been happening there. shanghai back open again, it's closed down by half a percentage point. in japan, the nikkei closed up by about 0.4%. and in core rearc the kospi higher, as well. part of this is because of the world bank and what it's saying about china. take a look at the dollar. it's up against the euro. also up against the swiss franc. the thought is the u.s. is withstanding the global
recession that could be on the move around many parts of the world. it take a look at gold rises. they've down sharply. >> would he feature football game and the fight song, did notre dame. >> you're right. on friday. >> 41-3. >> chuck todd, we have to get him back on. >> he called in sick today. we didn't bet anything. >> yoe bjoe bet chuck todd and him 13 points. >> first couple of sequences that miami had, two just the guy dropped the ball. it hit him in the hands. >> can chuck call in? >> yeah, time for the global markets report. and i was thinking about this.
we have probably 20 college games on now because of we got all these different sfags stati cable. all the pro teams are in full swing, all the nfl. and we've got all these playoff games going on. and i think about the sports that you have over there. is there anything to do on the weekend except stand around in the rain? >> you may have heard of the premier league, the most widely watched football league in the world. i don't know. >> let me ask you, how many games were there this weekend and did anyone score a single goal or was it 0-0? >> in the entire football league, there were probably -- >> three goals? on penalty kicks that they finally had to do it because no one else had scored. >> 100 teams in the premier league and all the others and we score some had goals. >> at least three.
>> there was a lot of rugby going on. and some golf, as well. >> look behind you and you're trying to export that to us today, too. look at that. what went on? everybody's in a bad mood over there? >> it's take matt tig. dramatic. >> he wants the music. this is even more dramatic. i'm more anxious than becky's stuff. >> weighted to the town siuwn d side. most of the stocks are under water, but we had some good gains last week.most of the sto water, but we had some good gains last week. ftse down about three quarters of a percent. so the the graphic representation is not as bad as it is.
xetra dax down about 1.3. there is some stock new that's worth looking at temperature more breaking news on the proposed bae/eads merger. you didn't push the button. we have the major shareholder invesco coming out, 13% stake, saying we don't like it, we're going to vote against it, we think it will damage the u.s. interests in bae and affect the liquidity. split shareholders. it will also impair heavily on the commercial products in the united states. they didn't like the going for growth. so just another fly in the ointment for the proposed merger. and finally, george osbourne spoke to us today, as well, about how he views the continuing ability of britain to deal with the situation. quick listen on that. >> one of the countries getting on top of our debt problems. we have a credible plan to reduce our budget deficit,
that's delivering very low interest rates for us in the markets at the moment. so that is the proof that there's international confidence in our plan. >> gilt yields are slightly lower. we're waiting for spain of course to ask for a bailout. spanish yields are lower. and if they stay in those sort of levels, spain will ride their luck for as long as they can. back to you. >> i was with you on that, ross. your audio guy was sleeping there for a second. we were going to step in and help you, but that was -- it was the eads, that's very unsettling what's happening with the eads. very unsettling. i'm anxious about how that finally plays out. >> no delay.
>> just flew right over ross. >> flew right over ross. we may eventually have really quick flights again. did you see this guy who is going to jump out of balloon? he'll break the sound barrier. but as you're falling, since there's no -- what keeps you at terminal velocity is the air. if there's no air, they think he'll he break the speed of sound. >> why is he doing this? >> because he can. >> yeah, because he wants to be the guy to drop from -- >> i jumped out of a about a roon once. it was only, you know -- >> on a bungee cord?
>> yeah. >> there was guy that did that and he went right into the ground. >> dumbest thing i've ever done. i'll never do it again. if you're tightly tethered up, it was done safely, but i would never do it again. >> if you ever apply to life insurance, they'll charge you more for that. coming up, another wild weekend on the campaign trail. the gridiron and the diamond. the hits, run, rhetoric. plus the national forecast as the northeast wakes up with a chill in the air. between listene numbers... ...and listening to your instinct duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. mike rowe here at a ford tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer.
who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer. between black and white answers... ...and 1,000 shades of grey duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.
big sunday for sports on nbc. drew brees and the new orleans saints broke johnny unitas record. an upset, colts held off the aaron rodgers drive and the packers to win 30-27. the pack missed a last second field goal. on to the baseball diamond, new york yankees won, never mind, but also the reds. reds won -- why are we showing that? reds won 9-0 and they're 2-0
already. reds smacked the san francisco giants to take a 2-0 lead in the best of five series. and college football rankings have been updated. now ranked 20th in the ap poll. knights now 5-0, syracuse are next. but notre dame was -- >> this is huge for notre dame because they haven't won. been doing so well that they lost the demographic. >> lsu got beat by florida and florida looked a lot better. and then georgia was supposed to
be good and they got killed by south carolina. and never in my lifeife did i tk kansas state would be at greatest team. >> we'll have harwood up in a moment, i know where you want to go. >> he will poke holes in every part of that study. is he so ready. >> in the meantime some news on the west. >> and it's cold and rainy. should you have your music for this. >> for the ominous weather. that's right. 42 degrees when we came in. had to make the kids put the shorts away. >> remember what happened last
october? >> yeah, snowstorm right before halloween. lots of power problems. let's get over to al leex walla at the weather channel. >> no doubt a chill in the air. temperatures stuck in the 40s, almost ten degrees below average. 35 right now in pittsburgh. and it's not just the northeast. look at the southern plains. oklahoma city 20 degrees below average. so a lot of the nation feeling the chill. generally dry in the northeast, although we'll see more clouds than sunshine. new york city only getting up to 55 for the day. a little bit of wet weather here throughout the carolina, down into florida. middle of the nation looks pretty quiet from st. louis to dallas. watch out for rain coming into the midwest later today. back to you. >> thank you very much. let's talk about the election if
we could. joining us now, chief washington correspondent john harwood. good morning to you, sir. >> good morning. where were the highlights about the nationals some? >> i was happy to see it. i could feel it coming, too, because they were down 2-1. and i've seen st. louis enough. a great team, they won last year, but -- >> they won last year. and our closer shut the cardinals down. pretty impressive. almost as impressive as the reds going up 2-0. >> would it be more disappointing if you would win the series and then lose badly to the reds? how would you like to play out? might be better to lose now. >> last time i checked --
>> one game better. that's like your two touchdowns -- >> home field advantage, baby. >> like you're two touch donees down in the late four quart in the election. you're dreaming just as much about that. >> let's talk about the election actually. we were talking before the break, so we have the colorado poll saying romney will win. ras mmussen up two for romney. >> do not bring up rasmussen. >> and chuck todd yesterday on meet the press talking about the enthusiasm gap. >> reuters has obama up. >> so how do you read it this morning? >> romney has some momentum from the debate. i think the debate is a more powerful political force in the race than the unemployment numbers that came out. we were all talking about those on friday. but you had more than north of 60 million people watching these
two guys on wednesday night and you see some momentum, democrats say the gap has narrowed in some states where obama had a lead. he's getting closer in most of the swing states. up two in rasmussen, down three in gallup. and the question is does this week continue that momentum. the vice president debate in the past has been critical for either accelerating or breaking the momentum one way or the other for the party in power. and we saw dick cheney came through twice for president bush, once in 2000 against joe lieberman when they were continuing the progress bush that in the first debate, second time was in breaking the momentum that john kerry had in 2004. and cheney bested john edwards in 2004, that helped him. so we have to see whether paul ryan, who is very smart policy
guy, can beat joe biden who makes shall mistake, but he's been around a long time and he those some thing. p. >> you wrote a column suting the debates ultimately are oftentimes historically irrelevant, that they don't change the outcome. is there something specifically happening this time that's different? >> what i said in that story was that historical pattern is that usually even if you have a surprisingly good first debate for one party or the other, usually they don't change the trajectory of the campaign. but every once in a while, and 2000 is the best example, a whole series of thins come together and the vice presidential debate is important in that process to accelerate the wave or stop it. and that's what we'll find out in kentucky later. >> you said the jobs number doesn't matter. is that in part this whole jack welch thing over the weekend around whether the numbers are real, does that matter in all of this? >> i think the jack welch stuff was crazy talk.
and earlier in the year when you guys were down in washington on this, joe and i talked about it, there were between points that i would make. one, nobody messes or manipulates these numbers. but, took i think we exaggerate the importance of the numbers for this reason. the people who will vote on november the 6th know what they feel about the economy already. they're living it every day. so because there's a headline that says 7.8, it's a talking point, but they already know what their friends and neighbors are doing. >> when do we find out how romney is fun raising compared to that 180 million or whatever? >> i think if it was so par with obama's, we would have heard already. i think it's probably behind. >> you don't hear that that's unbecoming to have so much money to spend.
just don't hear -- it's alway s the republicans. >> it's not decided by money. nice to have, but there is saturation information for the small number of swing voters. and even if obama beat romney by 20, 30 million, that won't make the difference. obama will have to improve his performance in the debates. >> a gallup poll has romney and obama tied at 47% each. >> that's early for gallup. >> right here. >> their daily track comes out at 1:00, but this could be a different mole. i'm not aware of this new poll. >> this is one they took afterwards. it's just -- >> i'm hearing about it for the first time. >> i think it just hit. it literally just hit. anyway, john, thank you. we'll talk again very soon. when we come back, do rich people who become congressional leaders stay that way?
we vlt details of a special capital assets investigation from the "washington post." plus how strong are the bulls? is there hope for the economy without the help of qe-3? that's all ahead. smart comes with 8 airbags,o3 a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.
assembly plant that makes the iphone 5. can you imagine if we didn't have enough iphone 5s in this country to conn says there haveo incidents, but they did not stop protection. foxconn sounds like a video game. >> or something out of a movie. >> angela merkel visiting greece today. her first visit since the debt crisis began. her reception likely to be hostile.
>> that's the guy, thursday night, three hours. had a great time together. interesting views. you would like him a lot. he believes the nanny state has done an awful thing. but the great challenge for him is he's having to try to balance both the interests that he thinks are the right ones with the competing interests of the way the people -- >> were you able to turn him around from all hothose notions? >> no, and i did continue try. there he is. good guy. he's fighting the good fight. >> and walmart and american express set to announce a joint announcement this morning. i don't think it will be a negative scary announcement. but they did not give details.
no criminal investigations, i don't think, although it sounds like something bad is coming. it would be related to financial services between the -- now i'm worried. stocks start october with a positive week, but not everyone is convinced the bulls are here to stay. peter, every week you give us the positives and negatives for the week, right, on friday. you can give them to me today for what's going to happen this week that will be positive and what will be negative? you can't, can you? >> well, it's tough, but i can try it predict. >> i look forward to when i get that. what are the big numbers? >> my concern are earnings. and while most companies i'm sure will beat numbers, of the lowered bar in q3, we still may
see negative growth for the first time in three years and the guidance is not going to be very good. if you do business overseas, how are you going to have much visibility and actually you'll have a lot less of it. and that's the concern i think of the markets. central bankers have an amazing ability to put beer goggles on investors. but now we'll see the reality of the slowing global economy and its impact on earnings that central bankers can't reverse. >> i like the term negative growth. will we see a surge downward in stock prices? >> rate of slippage may accelerate. >> so many times we say earnings are not growing as quickly, which is different. a diesel krags in a growth rate is different than actually having a negative comparison from a year ago.
>> 22 or something straight quarters that -- >> yes, but it's over and now we get to see whether we'll just flat line and before the next move higher or start to roll over. img the i think the next couple quarters we'll disappointme. >> jeff, we said leading into a five year high. is that ben bernanke induced? >> yes, qe, ben bernanke and europe. and it's less about in the short run the fundamentals and much more about the technicals around qe and reducing the tail risk of a break up in europe that has been powering this stock market. as we go forward, really the concerns are much of the good
news from qe and monetary policies intervention is already reflected in the prices. and what we'll go into is a period where we're wondering what's going on with regards to spain, will they ask for the money. and as your earlier segments talked about, we'll get into the thick of political uncertainty both for what it means in terms of the election results and what means about fiscal cliff. so it's those things where we're concerned about in the short run. markets have run p a little too fast given the uncertainties that they have to get through in the next couple weeks. >> how long can the u.s. stand alone? >> u.s. is barely avoiding that. we saw 1.3% gdp growth in q2, maybe we'll see 1 1/2 in q3. so we're barely doing that. but certainly low interest rates are helping certain segments of the economy that are keeping from us that.
but we're certainly not immune. we're barely on the kisk of a re. and if europe continues to deteriorate, if asia does led by china, well also. >> what can did you think of friday's jobs number? >> i look at the u-6. to me, looking at the u qu-3 is good headline number, but the household survey is extremely volatile. we saw a lot of part-time workers. to me it was a very ordinary mode oak mediocre jobs number. >> we have seen come from over 10% down to 7.8 averaging what supposedly isn't enough just to break even. how it work, i don't know. there's the participation rate has been coming down, part-time workers, a lot of government jobs added. but for some reason, i've always been told you need 200 to 250 to make a dent.
114 got a 300 basis point drop? it's crazy. and there's a reason -- you know what they're calling people that are saying this. they're calling help truthers. throwing them in with the birthers. >> i don't believe that there was conspiracy to make the jobs number -- >> i know that. and anyone that says that will be called a truther. so you don't say the government's lying. you can't say that. yet if you add in two months more government workers than at any it time since 1948 for the past two months, the government can do -- >> but that goes to his point the u-6 number is -- i don't know if it's more accurate. >> it's broader and takes in to account the part-time workers that don't want to be part-time. they want the full-time job. so it's a broader measure of giving us the breadth of the labor market and the health of it and that's why when i say the unchanged number, i sort of ignored the headline number and didn't think it was that big of a deal. >> normally we'd focus on the
114, but, man, when you can go to 7.8 -- accoucan the fundamen catch up with where the market is? can it just tread water and the full fundamentals come up? >> look at all the global printing. >> all right. we have to go. jeff, you'll just have to agree with peter on this one. >> okay. see you next time. if you have any comment ors questi question, e-mail us. still ahead, did you ever wonder how members of congress manage their money or if they go through highs and lows like everybody else? we have the results of a special "washington post" study coming your way.
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a quick look at u.s. futures. dow looks like it would open 50 points lower, s&p 500 open almost 6 1/2 points off. let's talk movies. the box office was taken to starring lstar i ing -- taken 2. >> second time one of his loved ones is kidnapped. i mean, you're -- don't let them go to europe is what i would -- that's rough. >> for that movie -- >> do do you a taken 3? at that point, what do you say, come on, what are the chances.
>> anyway, that was the hollywood report. >> liam neeson's great. >> he is pretty good. >> when we come back, we'll talk about how u.s. lawmakers handle their money. do they play the market, did they fall victim to the financial crisis in the "washington post" unveils the results of a special report. "squawk box" is on facebook. like the show. and get updates, commentary, news and much more. add us to your pages and keep up with what's happening on the show. "squawk box" on facebook and cnbc. smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. which can withstand over three and a half tons.
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welcome back, everybody. "the washington post" unveiling part one of its special two-part series on congressional finance this weekend, and what it find may surprise you. joining us is kimberly kindy, "washington post's" investigative reporter and one of the authors on this piece. kimberly is may surprise people or may not surprise them that the rich in congress tend to get richer? >> well, yes, maybe that's one of the findings that wouldn't be terribly surprising, but i still think that even within that group of people, the wealthy
lawmake lawmakers, there were some surprising results. we looked at dividing them essentially one of the slices, divided them into thirds so we had the upper, you know, third, most wealthy, then the middle, and then the bottom, but that top one-third, when we looked at how they did during the financial crisis, most americans, they experienced a 39% loss in their portfolios, and they're still trying to recover, but with this group of people, they flatlined which a lot of people would have liked to have just flatlined during the crisis and then their wealth just skyrocketed. we also -- sorry, go ahead. >> what was the other point? >> we also saw within that group we also had 72 lawmakers whose wealth doubled and we're talking about people like darrell issa, so it went from 25,000 to 50,000 in assets, we're talking in 2010
he was up to $448 million in his portfolio. >> i thought that was interesting, a lot of people might not realize darrell issa came to congress and was wealthy because he sold a company. maybe you can describe a little bit. just saying he doubled his wealth from 2004 to 2010 may not tell the whole story. >> right, exactly. what darrell issa, elsehe's a g example of how congress is beginning to look more and more. the wealthy can finance campaigns and so more and more we're seeing the wealthy people coming to congress already very wealthy and then once they get to congress, they tend to do very well in terms of stability, no matter what's happening, and in terms of that wealth really going through the roof. and so when he came to congress, i'm sorry, i'm having this fell out myself ear. >> kimberly, my question is, the
natural next step is the assumption that they are doing something wrong, trading on their own accounts there or trading on inside information. is that something that "the washington post" is alleging? >> well, no. that's not exactly what this project, this particular project looked at. what we were really looking at was trying to, with this particular story tell people what their assets looked like, what kind of investors they are, how they fare and one of the surprising results was that not everybody is wealthy. we had 20 members of congress who, during, from 2004 to 2010 whose wealth went down 50%, their assets really dropped. we had two dozen whose assets went into the negative. >> i saw steny hoyer was one who did not fair as well during the financial crisis. my question for people who look at that, if you are a viewer at home who is looking at this, does this mean that we're implying that the people who did well had some sort of inside information or otherwise are they just a little better off
about managing their money? in darrell issa's case he said he's in more plain vanilla investments at this point versus some of the ups and downs he had seen before. >> this particular story didn't look at that but i would encourage people, because we've been working on stories that looked at this very thing you're talking about, the intersection between what members of congress do by virtue of being in office, earmarks they are able to secure, legislation that they're able to pass and how that intersects with their financial portfolio. >> kimberly, real quick, what percentage of folks in congress are doing this blindly, meaning either they blind trust or it's being managed by somebody else, paul ryan we know, a lot of his money managed by others. how do you look at that issue vis-a-vis the conclusions you've come to? >> well, that definitely is an issue. we have many members of congress who have other people managing their portfolios, in all of
those cases when we were asking specific questions about how a bill that he introduced or earmark they got, when that intersected with financial decisions that were made we asked them for the ability to talk to their brokers, and in most cases, yes, lots of them have -- >> kimberly, you got anything on harry reid? i see so much written on the blogosphere that he's got a lot of dough, and hasn't released any tax returns, zero tax returns i think. what did you find out, anything? >> billion in a prior story, not this story, when we looked at earmarks we did find earmarks that was very close to his undeveloped property. >> right, i saw a nice deal here on a land deal in 1998, 700 grand. anyway, just wondered. >> right, exactly. we have a whole host of stories that we've done that look more at this intersection between their duties and their personal
assets and that's -- >> that's the best way, not with a couple of, you know, stock tips in congress. i like it ben they do the earmarks, where they buy something and then maybe check the former speaker, too. anyway, right? kimberly, thank you. appreciate it. >> thank you very much for having me. >> all right, see you. oh, it's me. coming up, this morning's top stories set to foreboding music. the rails for the white house, both hitting the campaign trail. former governors face off in the issues and former hp boss carly fiorina, why she calls the board a serial dysfunction, and not like cereal. your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate.
from the campaign trail to the board room. former hp chief carly fiorina is here on business trends in the tech world and the run for the white house. your money, your vote. former virginia governor james gilmore and former pennsylvania governor ed rendell to talk about the fight for the oval office. what's in store for silicon valley? the second hour of "squawk box" starts right now. good morning. welcome back to "squawk box" here on cnbc. i'm andrew ross sorkin along with joe kernen and becky quick. getting ready in the green room this morning, carly fiorina, former hp chairman and ceo, now vice chair of the national republican senatorial committee,
from tech to china spying to the election, her thoughts coming up this morning. at bottom of the hour we'll talk jobs and the election with james gilmore and ed rendell and 8:00 a.m., former chairman of uba americas robert wolf, we'll talk financials and the elections and much more with him. first to beck wii why the morning headlines. >> all right, andrew, thank you very much. good morning, everybody. the futures are indicated lower, right now the dow futures down by about 49 points, the s&p futures are off by over 5 points, this is coming as there are a lot of concerns about the global economy, you can see it just about everywhere. also, it is likely to be a slower than average day on wall street, you have a lot of businesses closed today because of the columbus day holiday. stocks are coming off their first positive weeks in three weeks and the dow's friday close was its highest in nearly five
years. you have positive economic signs from china. hsbc service rose from the highest level since may but the world bank is cutting assumptions for growth for china, probably the more powerful china story. negotiations condition between dish network and gannett. at 2:00 p.m. eastern time the deadline passed without agreement but the two sides agreed to keep talking. dish carries gannett stations in 19 cities. unitedhealth care combined with amil, paying $4.9 billion in cash for 90% of amil's outstanding shares. and the house intelligence committee saying that american companies should avoid doing business with china's two leading technology firms because
they pose a national security threat, a year-long probe suggests that huawei technologies and zte corporation both suppliers of telecom equipment and mobile phones oppose a security risk and the equipment could be used for spying. the committee recommends the government systems should not include any components made by the companies and they may have violated some u.s. laws. it is likely to become fodder for the u.s. presidential campaign, and there was a big piece -- >> on "60 minutes" and "wall street journal" and chavez won. >> apparently this is just a rumor, the bls the entire of bureau labor statistics from here was flown down to venezuela to monitor the election. >> the chicago guys were thrown
down. >> ba-dum-boom. let's get to the story, the venezuelan president hugo chavez as joe was just saying -- >> 54-45. >> comfortable election victory that could extend his rule to 20 years. the next election isn't officially for six years but you had tens of thousands of ecstatic supporters flooding the streets around the presidential palace in downtown caracas, pumped their fists in the air and started shouting chavez's name. enrique capriles, he was beat by more than nine points. it will extend a wave of nationalizations and continue his support for left wing allies. we've heard how important this is for cuba, he has billions at his fingertips because of the oil produced there. this is the country we think has the biggest oil reserves in the
world at this point. >> in the world. >> all right. 54-45, what do you think it really was? we'll never know. we'll never know. and the bls and he's got a lot of people hoping that you can get votes from people down there, right? >> that is true. >> his 47% is actually like a 70% down there, so only getting 54 means that out of the 70 that are receiving, even 20-some probably didn't vote for him. >> a lot of that money the billions he's controlled has gone to buy apartments and appliances for people. >> there's no supply of anything down there. i don't even think you can -- >> that's what countered it, high crime levels, blackouts. >> the people that live there may be on the receiving end but there's nothing to receive. the economy is producing nothing in oil. okay, let's talk gas, california, how about that in. >> if we must. what do you have?
>> sky high gas prices are rocking the golden state for another day. california drivers are paying on average a record-breaking $4.65 a gallon, for unleaded gas. that's four cents more than they were paying yesterday but there's comebacks, shelling out $5 or more per gallon at some stations. jerry brown taking action in an effort to drive down the cost of gasoline. the governor's allowed winter blend gasoline to be sold in california earlier than usual to bring down the prices. the dramatic surge came after a power outage last monday to a southern california refinery that reduced supply. prices were expected to stabilize in the coming days. let's get to london for an update on the markets this morning overseas, cnbc's ross westgate joins us with an update, has it changed much? there's a lot of red behind you there. >> not an awful lot, andrew, since we spoke about an hour or so ago. not quite at the session low.
8:1 decliners outpacing advancers on the dow jones stock 600. ule though it looks dramatic the numbers aren't bad when you consider the gains we had last week. the cac up nearly 3%, the ftse was up over 2%. today down three-quarters for the ftse. angela merkel will go to greece tomorrow for the first time since the financial cries sois we wi crisis so we'll monitor the reception she gets there but they're still working out whether or not they'll meet conditional ate and a eurozone finance minister's meeting will launch the esm. bae and eads, 13% of the stock come out and say we do not
approve of the merger, we don't understand strategic logic and it will jeopardize bae's position in the u.s. defense market as well and impair the commercial prospects for the business. they've said this combination between these two stocks should not happen, not at least if you also have a dual listing t will also impair the liquidity for the stocks as well. that's a big private hairholder coming out, let alone the government shareholders can't agree on it either. and george osbourne, the uk chancellor is speaking at the conservative party conference expecting him to confirm another $10 billion in welfare savings. the key someone spain, 5.65% so yields are slightly lower once again as those yields stay at those levels the spanish government will say it's a fairly manageable situation at the moment so they will keep probably delaying having to ask for a bailout trying to get beyond a referendum in
catalouna, a big region in spain. back to you guys. >> ross, last week when the spanish finance minister said that in front of a bunch of people they laughed at him? >> he was up the road, the london school of economics basically said we don't need a bailout and in spain when they talk about bailouts, there are different sorts. i think when he says we don't need that kind of bailout he's talking about the sort of bailout program you got in portugal and ireland and greece which is big condition heavy troika coming in. even if they asked for assistance they're asking not to have a bailout like that. >> we don't node one with conditions, right? >> and we don't need one with inspection teams. >> skyfall, ross, october 26, adele is a theme song for you apparently one of her songs. >> i've got a special report coming up for you just for that film. >> do you? >> previewing the music, too.
>> who is the bond girl in this? >> kelly evans. >> ray fein is in. albert finney, holy smokes, coming out the 26th. do you know anything about it? >> i've seen the trailer, looks pretty cool. >> he's killed like 480 people in his films, james bond. if you have, if you feel bad when you kill someone, they're p bad guys. >> he's been like four guys, divide that. >> five if you include ross. comments or questions about anything you see here, e-mail us at firstname.lastname@example.org and follow us on twitter @squawkcnbc is our handle. i'm @joesquawk? or you can do my
ap.@joesquawkshair o or @joekernenshair. >> jeff mackey is up early. we'll welcome next carly fiorina, at the bottom of the hour, mitt romney gaining ground on president obama in the latest -- i'm not going to say this word. this word has been banned from my vocabulary so i'm not going to say it. >> rasmussen. >> if you do, it's at your own peril. we'll talk to governors on both sides of the aisle about the race for the white house. "squawk box" is on facebook, "like" the show and get upupdates, commentary, news and much more. add to us your pages and keep up with what's happening on the show. "squawk box" on facebook, and cnbc.
hewlett-packard squandered five years of leadership by failing to invest where necessary. >> who was doing that, herd? >> yes, herd failed to invest. the street loved him, he made his earnings, majored in cost-cutting but technology companies have to do more than cut costs so now they're in a tough spot and they've made a couple bad acquisitions, the value of eds has been written off completely. >> it's been written off? >> written off completely. >> $10 billion autonomy. >> $10 billion in cash. >> that's got to be written off. >> and not paying off and i think the problem now is companies don't have endless time anymore. the competitive landscape is very, very tough, so when someone says i need four or five years to turn around, that's difficult. >> by then a lot of companies that are looking for this total you know, where someone like an ibm or an oracle or something like that, that's who they're competing with, looking for a
complete answer to all of their technology needs and they're going to pick before four or five years and be in bed with some of the other competitors, no? >> i think that's the difficulty now. you have businesses in decline printing and pcs, you have a businesses and services that isn't on its feet yet, draining revenue out of that. obviously they're making some important investments in information systems and sales force training but those aren't necessarily turnaround items. >> who is getting all their business. it's not a zero sum game. ibm as well as oracle? >> ibm is doing well. oracle would claim that. larry ellison -- >> if there's no great turnaround story is there anyone you can sell the business to? >> i'm not in there anymore and feel sorry for the management team. i would encourage every strategic alternative to be on the table. it hases to be. >> put a for sale sign up? >> not necessarily but you have to examine carefully what your
choices are because -- >> what do you think the other, besides growing organically what are the realistic choices you think they have? >> i think there are potentially some way of restructuring the business, you know, the pc spin-off i did not support at the time and they've pulled that back but now you really have to start to look at things like that. i would just argue you have to consider everything. when we acquired compaq we looked at ten alternatives, ranged from splitting the company up to making totally different acquisitions and that strategic rigor is required now. >> there have been a lot of questions about the board, with all the turmoil the company's gone through for so many years at this point. does the board have the people there who will be pushing for the right discussions around the table? >> well, i don't know, but i would say this, as i wrote in a blog for cnbc a couple months ago, boards are also accountable for the performance of companies
and while i wasn't being specific to hewlett-packard i would include hewlett-packard. the board generally at hewlett-packard has destroyed value over five, six, seven years, just like the board has destroyed value at kodak, the board has destroyed value at r.i.m. boards need to be held accountable and the people on the board have changed over time but nevertheless this is a lot of upheaval and a lot of back and forth on hugely important strategic choices. >> do you see tim larts that hewlett-packard, eastman kodak, dow components, brand names, that's what i've worried about in the past, that's going to be the end game? >> obviously i hope not. i have great affection for the company and own stock and have friends there but i guess the reason i bring kodak up is because kodak is a reminder that even a great company with a great brand name can lose its way and run out of time. and that's why strategic alternatives have to be
considered. >> you must have some pointed ideas about what to do. it's one thing to criticize a company and this company has been clearly criticized. it's another to say okay here's the problem, but there's a couple of options and here's some ways to fix it. you must have one or two things you've been thinking about. >> so first of all i don't spend all of my time think being hewlett-packard. >> a little bit. >> i guess i would say this, what the company has said is that it believes its future is in unstructured data and in the enterprise space. it has said that's why it acquired autonomy, that's why it remains in the services business, so if that's the case, i guess what i would say is they really have to put forward a very strong argument about why they can win in the enterprise space that will rely on their server business, their storage business, both of which are in decline, and they then have to be very clear about why or whether or if the pc and the printer business that are more consumer facing fit with that enterprise strategy and i don't
think they've laid that story out. >> this is kind of an odd twist to think into, but the lead story in "the journal" today, "60 minutes" yesterday was wahwei and this other company in china, don't buy any of these products the u.s. is saying. if you see companies like hp get rid of their pc divisions and see some of the declines of the others, where does it leave us in terms of some of the electronics out there. competition from china undercuts everybody. >> in wawei i'm pleased this congressional committee finally said what i think is clearly true. i remember sitting on the board at cisco when john chambers made what was at the time a courageous decision to sue wawei for theft of intellectual property. there's no question wawei engaged in systematic theft of intellectual property, there's no question in my mind that any
large enterprise is connected to the chinese government despite their protestations to the contrary so that's a big deal. it's a huge deal, and i think we have to be smart as both business people and political people about what we're up against and that's why i think we have to be very tough with china about impacting their economic self-interest, because that's the only thing that the chinese respond to is pressure on their economic self-interest, not human rights discussions, none of the rest of it, economic sanctions. >> you buy hewlett-packard or yahoo!? >> i'm not buying either but i'm not a stock picker. >> this is wawa is fine. >> wawa is good, the 7-eleven like. >> are you talking about barbara walters in. >> i'm thirsty, i need some wawa, but wawei, different thing entirely. much more to come, so they're fine. >> they're fine. so we're lucky to have carly here, we'll talk more about this
stuff. the battle by the bay the reds in command of the giants. highlights of sports next. as we head to a break check out the futures this morning, we have red arrows across the board, dow looks like it would open 55 points off. "squawk box" is back after a quick break. tridion safety cell which can withstand over three and a half tons. small in size. big on safety. [ male announcer ] how do you turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts... ♪ into a high-tech masterpiece? ♪ whatever your business challenge, dell has the technology and services to help you solve it.
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welcome back, everybody. time for sports talk. this is tit for tat, joe, you talked about "scar cllet knight" >> there you go again with the potty mouth. read it and read it with feeling. >> the cincinnati reds have a two-game lead over the san francisco giants. arroyo pitched seven innings giving up one hit and striking out four. it was his first career win -- >>? a playoff game. >> the reds winning 9-0 and taking a 2-0 lead in the nlds. >> just stop right there. >> let answer let this play out a little pit. >> you have to read this next story. >> the yankees and the orioles squared off in the first game of the alds, this game was tied up until the ninth inning when russell martin, the yankees martin smashed a solo homer.
the yanks would take on insurance runs in the inning, cc sabathia almost going the distance, and in the nfl the winless saints hosting the chargers, drew brees breaking johnny unitas' record of consecutive passes. new orleans wins over the chargers, 31-24. >> almost looked like peyton was going to do it, too. >> that was huge. >> they were talking about the ongoing rivalry. >> he was on his way. >> he was mad, i watched the end of that game, he was mad at the end. >> he was mad because of the fumble after they got it back, if they had won, i don't know what would have happen they would have needed a field goal. >> we've got to go to break but
take a listen in honor of fire prevex week, president obama acknowledging his weak performance at last week's debate but was it enough to put out the flames? this is a lame pun. we hear from former pennsylvania governor ed rendell next and preview this week's vice presidential debate and later, leadership for a new generation a former apple executive who worked closely with steve jobs will join our guest host carly fiorina to talk test success and lessions learned. time for your "squawk box" history lesson. what year did "squawk box" debut? logon and like the facebook page. we're posting classic moments all week long, receive updates and post your comments about the show. "squawk box" on cnbc, and on facebook. numbers... ...and listening to your instinct. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.
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slower than normal as many businesses are closed for the columbus day holiday. plenty to look forward to later this week with earnings season getting under way tomorrow and the fed set to release its latest beige book wednesday. angela merkel is set to visit greece in a visit likely marked by protests. merkel will meet with the country's prime minister to show support for his coalition government but greek citizens are upset with merkel for her criticism of the country's fiscal situation over the past few years. and apple fire foxconn denying work stoppage. there were several disputes between assembly line workers and quality control personnel but said those disagreements did not stop production. becky? there obviously is big momentum swings for the obama and romney campaigns but we have a long way to go before november 6th. joining success former virginia governor james gill momore, a ry
surrogate and former pennsylvania governor ed rendell. good morning, gentlemen. >> good morning. >> we've been watching some of the polls coming out this morning and over the weekend and they show a significant swing after the debate, gallup poll in the post debate october 4th through the 6th on the polling they did see that at least at this point they have romney and obama tied at 47-47, a lot of other polls we've been going through. governor gilmore what do you think happened and what do you think needs to happen at least from the romney campaign perspective as we get into the last two debates? >> well, becky, i think that the democratic party had been painting governor romney as some cartoon, that he didn't like people, didn't like americans. i think the debate allowed people to see him directly and to understand and get a feel for him and to know that he does care not just about some americans but all americans, and
that means that he's got to continue to pound out there, that we need to have a better policy, an economic policy and that we need to get more jobs, we get more people employed and frankly you're not going to, unless there's a change in america's economic policy and we can't afford to wait and that's the message that he's got to do. but the good news is that the polls are showing that the people are closing in and that things are getting better, some polls are showing him ahead now in virginia, within one in ohio, ahead in colorado, ahead in florida, and if those things come to fruition, i think he's going to win the presidential election, i'm pretty happy about it. >> governor rendell we noticed that president obama in the last debate did not look like he's prepared. i doubt we'll see the same performance the next time around. what do you think he needs to do? >> well i think he needs to be more aggressive. first of all he needs to be more passionate about his accomplishments and his accomplishments i think are fairly significant. he took over a country that was on the brink of financial
collapse, saved the financial syst system, got the american automobile manufacturing system again, we've had half a million manufacturing jobs, best period of manufacturing growth in a while, housing starts are up, consumer confidence is up, automobile sales are up, rail traffic is up, the unemployment rate is under 8%, we're headed in the right direction and i think he's got to be pretty affirmative about that and i think he also has to call governor romney on the inconsistencies we saw in the first debate but i think jim is right, governor romney terrific performance, showed himself to be a leader, really did away with a lot of those preconceived notions that people had and it's really game on. >> they got by accident that -- ed, just listening to you -- >> no, hey, joe, governor romney was responsible for a lot of those himself. >> yeah, right, when you cut out a clip little sound bites. you know how --
>> it was his fault for not getting out. >> yeah but. >> at least you didn't say it, you're not going to call governor romney a liar and a cheater and blame jim lehrer for not -- obama talked four minutes more but that we're going to hear tonight. he's a liar and cheater, that's really a pathetic answer to what happened in that debate. and if he was a liar the president should have called him out on it. why didn't president challenge him? >> somebody want to talk? >> the most important -- >> governor rendell, i'd like to hear governor rendell's response to that first, i'm sorry. >> i don't believe you call people a liar, et cetera. look there's no question -- >> axelrod. >> -- governor romney changed his position in that debate radically. first of all he said he would sign the ryan budget which has a 20% tax cut across the board for everybody including the richest americans. number two he never explained and the president didn't call him on it how he'll account for
that almost $5 trillion cut, plus the $2 trillion in military spending that they advocate which the defense department and the generals haven't even asked for. there's been no explanation of that and that's a pretty important issue. the president didn't do a good job framing that issue. there's no question. >> you're such a savvy politician. you're the best, and you know, if you lose a game and say well the other guy cheated that makes you look bad. there's no upside to that. you should be advising his people that's not the way to do this. >> and joe, one other thing i want to say, i think jim realized this, i was around for the, president reagan's first re-election debate, you recall he gave a terrible performance, he wandered in his closing, almost looked like he didn't know where he was and dropped to about five points, walter mondale was five points behind
and president reagan went on to win 49 states. >> the most important thing i can tell your viewers is this, you got to put this in perspective and we cannot wait. america has always grown at about 3.2%, we're growing under 2% right now. we've got unemployment that is historic highs and been there for four years. at some point the president has to take responsibility for this and ed knows this. he's had four years to make things significantly better, he said he was going to, and he hasn't. the point is if you wait four more years, look at the loss to the united states of america of people being unemployed. young people coming out of college and can't find jobs. people who have had their careers interrupted, people who are working less than they want to work. the time has come for some vigorous leadership and that means we have to have a change and i think ed knows this, but he's just a great spokesman for the democrats. >> well, two things to respond to that, if i could, becky. >> sure. >> number one the cbo says, the congressional budget office says
if the jobs bill that president obama proposed last october, which had components in it, republicans supported, had the republican congress passed that, we would have had 1 million to 2 million new jobs created in the interim. number two what jim leaves out is governor romney's proposal is the same proposal, cut regulations, cut taxes, that president bush undertook and we had four of the five worst job creation numbers in the last 60. >> what romney said on the stage wednesday night was we'd be bringing down rates but you shouldn't expect any type of a tax cut because he's going to get rid of deductions, too, so it would be revenue neutral. >> that is inconsistent with everything he said up to wednesday night. >> no. >> but number two, no, joe, it is. >> it's that non-partisan study found with all those assumptions they didn't have anything that he said so they made all these
assumptions, ed. >> he said we would sign the ryan budget, the ryan budget calls for across the board 20% tax cut but hear me out. it's not the tax cut i'm focusing on. when you cut taxes, or leave the bush tax cuts in place, et cetera, and get rid of regulations, that's supposed to generate growth in the economy. well, let the record show in the last six years a60 years our te years of job creation occurred when the marginal tax rate was over 50%. >> oh my god. >> of the top 20 and you can look that up, joe. >> i know, but -- >> we had the best -- >> same unemployment rate for the eight years of clinton as for the eight years of bush, 5.2, 5.3. >> but i'm looking at the last 60 years. >> right. >> cutting taxes and reducing regulations does not produce job growth. and the record backs it up.
the record backs it up. >> but that's like talking in a vacuum without any of the external factors. >> not over 60 years. s acraze aas casey stengle saidn look it up. >> over 60 years the united states of america has always grown at about 3.2%. >> i'm talking about job creation. >> you can look it up. >> it is eloquent but the fact is you've got to have decisive ways of increasing investment in this country so you can create jobs that's going to require a change in the law, a change of policy, governor romney is being decisive about it and frankly the president looks very weak and indecisive and doesn't have a plan to make things better. what are we going to do, mark time for another four years? think of the damage that does not just to the country but to individual people. it's time for a change. >> ed, out of curiosity, what time frame was that over the last 60 years, what time period are we talking about? >> 1950 to 2010.
>> no, but i mean, when, what time period specifically are you talking about between 1950 and 2010 when we had over 50% tax rates and also the highest job creation? >> you know, becky, i can't tell you offhand but i know that's true. >> we'll look at that. >> to the modern days, bill clinton increased taxes on the top 2% and you heard wailing it was going to be a recession and depression. >> cut taxes on dividend gains. >> and we had 23.5 million new jobs. i'm not saying -- >> let's shift if i may. >> sorry. >> sure, you're the host. >> this is carly fiorina. one of the things that president obama has slammed governor romney for consistently is a lack of specifics, and it's true that governor romney has had a 49-point economic plan up on his website for some time. one of the things that surprised me is president obama said that he had on his website a $4 trillion deficit reduction plan. governor rendell, do you no he
what that $4 trillion deficit reduction plan is? >> sure. >> i think the american people would want to know more about that and he never followed through and explained it. >> he's not as specific as he could be on that, too. he said during the debate he would put in place something along the lines of simpson-bowles and you know what simpson-bowles calls for spending cuts, entitlement cuts, defense cuts and raising revenue. so that is i think fairly absolutely clear. look, in terms of specifics, the one important specific, let's assume we take governor romney at his word, he's not going to raise taxes, that the tax cuts and rate are going to be paid for by eliminating loopholes and deductions. governor romney wouldn't and jim lehrer didn't press him on this enough and to be honest president obama did a poor job in not pressing him, he didn't give us one example of a deduction that he would cut. the american people are owed that explanation, big time, guys. >> what i wonder is why president obama didn't embrace
simpson-bowles when it came out two years ago. i mean we could have made a lot of progress. >> he got some bad advice, but when he and boehner came close to the big deal, he was embracing simpson-bowles. >> well, simpson-bowles is no panacea either. it raises taxes, reduce investment and reduce jobs. >> paul ryan didn't want to do it either. it's a tough one. >> governors, thank you very much. we'll see you and talk to you again soon >> thank you. coming up next we'll talk about what the tech world can learn from apple, a lesson from a top executive who worked directly with steve jobs. [ horn honks ]
i mean i know that this is important. well, both are important. let's be clear. they are but this is important too. [ man ] the receivables. [ male announcer ] michelin knows it's better for xerox to help manage their finance processing. so they can focus on keeping the world moving. with xerox, you're ready for real business.
wefr' back. companies finding themselves in head-to-head competition with. apple are finding it hard to keep up. jay elliott, former senior vice president of apple and author of "management lessones from a controversial genius" jay reported directly to steve jobs and during his tenure apple sales grew from $150 million to more than $3 billion. thank you for joining us, jay. >> thank you. >> quick note you did this in the '80s, through 1986, not during this latest period, but it does raise the following question about apple today and i want to get your thoughts on tech more broadly in a second. when you think about apple post
steve jobs and we saw what happened to apple post steve jobs in the '80s, can it keep up? >> absolutely. i think that he's put together a great team, leadership is very important within apple and steve took as much pride in leadership of apple as he did the product itself and he's crafted i think a great team to follow him. he can't be replaced. >> after he left in the '80s and you were there, apple faltered. it's easy to say. >> apple faltered because he had the wrong ceo and a guy who didn't understand the tech business but under current of apple when steve came back the reason they accelerated so successfully is in place was a great culture and great group of people who were still there. apple was in place, unfortunately they didn't have a right product division. >> do you have views on hewlett-packard? >> absolutely. greatest success of apple and
part of my book is called the product vision. and hewlett-packard has totally lost its product vision. here they had the greatest printer in the world, they had the printer market, they don't do that anymore. i have all the hp printers, they haven't kept up. the issue with hewlett-packard, what is their product strategy, what is their products. that's what they're missing. >> on the front page of the new york times is a long report on the battle over patents in silicon valley and the impacts it's having. how big of a problem is that? >> it's a huge problem. they have to understand, we have to find some way to bring manufacturing back to the united states and one way we did at apple, we had an automated factory before steve left and we had a way to make things a lot faster, a lot better. >> is it realistic to bring manufacturing of these computers and smartphones and whatnot back to the u.s.? >> i believe it is.
>> sorry, james, i agree with jay. you see wages rising in asia. you're not going to bring everything back but even during my time we were still manufacturing servers and storage in the united states. yes, it is possible. the scheme steve jobs had, i can remember in fact taking a walk, this was his version of a meeting we took a walk in the foothills behind stanford university, and he confided in me that day that he was going to open apple stores which was an incredibly bold vision at the time, foolish me, i tried to talk him out of it. i was clearly wrong. here's the this ing steve jobs that many owners don't have the luxury of having. steve jobs was the founder so he had the courage and conviction to do things that a lot of people feel they don't have the latitude to do today and opening retail stores was a huge bet.
it's an incredibly tough business. they poured tons of money in it. jay is absolutely right, it was the ultimate showcase for his beautiful products and that's how he described his products as beautiful and he described hewlett-packard printers, i remember him calling me saying carly the printers need to be more beautiful. and he was right. >> jay, here is an operations question. you worked side by side with steve. some people would say he was not a nice guy, and that part of that was the genius, though, in all of this. can you be a nice guy and still finish first? >> yes, you can. in fact, one of the reasons i wrote the book is i don't like some of the books written about him. steve was the greatest leader i've ever worked for. carly is right i probably walked hundreds of miles with steve. he was about understanding where he was going to go. he had some moments. if we look at the positive versus the few negative parts of his personality. it wasn't about you, it was about the product. what are you doing to make our product better and better and better and that's what came out
and that's where he'd get testy. the last few years of his life he accelerated everything and that was part of what he was trying to do. >> jay, we have to leave it there but we appreciate your time. of course, the book called "leading apple with steve jobs" we thank you for it. > >> thank you. coming up, having trouble with balancing your portfolio, some people are. does this market have you on edge and are you looking to slash your losers? we'll talk all about that in our next segments and kids don't try this at home. you're looking at a 65-foot knife weighing three tons and a guy who thinks it's smart to walk on the edge of it. with "squawk box" you live on the edge. we're back in just a minute. ♪
all day long cnbc will check out the performance of different sectors. sima modi put biotech under the microscope. you know the nobel prize for medicine was announced today, stem cells. >> that's right. >> stem cells what they awarded for, you know who is waiting? biting his nails? >> bill clinton. >> bubba is hoping. barack obama won a nobel peace prize before bubba, so did al gore. >> well, if you are looking for beta, biotech might be your answer. the biotech index is up 47% just
in year outperforming the s&p 500 by 30%. investors continue to seek out the group for its growth from prospekts. eric schmidt says more and more growth fund managers are taking interest in biotech where earnings are not correlated with the macro environment. ubs writes that alexion is a significant double-digit growth driver but uses the orphan drug model where pricing and reimbursement are insulated, the biotech is up a whopping 400% over the past three years. keep in mind this is a speculative takeout target. another standout stock, gilead sciences is up 70% year-to-date, ubs has it as its top large tech biotech pick, it's attractively trading to a discount to the biotech sector, biogen up 50% in the past year thanks to its strong earnings performance and
anticipation riding behind its multiple sclerosis drug bg12 which could get approval by year's end. another is buyout speculation. the firms are on the hunt for under the radar biotech firms, bristol-myers among others making big bets. andrew you've been following that as well. >> thank you for that report. lot of beta. see if there's any alpha. in the next hour of "squawk box" former ubs american chairman robert wolf will join us to talk financials, jobs and the election, mr. obama's favorite banker. and later health care, a major issue for americans in the presidential candidates, the coo of mt. sinai, ken david, is going to join us. a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.
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[ male announcer ] the exceedingly nimble, ridiculously agile, tight turning, fun to drive 2013 smart. ♪ your money, your vote. former ubs america's chairman robert wolf on the political impact of friday's jobs number and this thursday's vice presidential debate. wolf is a leading fund-raiser for the obama campaign. quicking america's health care system. >> anything unusual during my procedure? >> yes, no. >> you said yes first. >> no is what i ended with.
>> the president of mt. sinai hospital on reducing health costs and improving care. state and local governments desperate to cover budget shortfalls are turning to sin for salvation. we're going to get a live report from the third casino to open in ohio in less than a year. the third hour of "squawk box" starts right now. ♪ welcome back to "squawk box." i'm joe kernen with long with becky quick and andrew -- what do you want to be, dice, power. >> they shaved my head and hair off. >> joe kernen's hair and you're
becky's heart or something. becky's brain. >> yep. >> our guest host is carly fiorina, vice chairman of the republican senatorial committee and we're going to talk about a lot of stuff, but in addition with carly we also have, talk politics and jobs with robert wolf, former chairman of ubs americas and fund-raiser for president obama's campaign. we need a new picture, i think, because he's much thinner now and unbelievable. no lap stuff or anything, this is just you, just being a man. >> just working out. eating better. >> eating better and working out. >> and my kids giving me a little hell. >> tv show, the cam camera, that's my problem. i don't look like this even now. you know how i look to you, i don't look like this because this camera is adding weight to me right now. >> carly will devise the new technology that you lose weight on tv. >> there you go. take eight pounds off.
maybe this guy will help us, health reform with dr. ken davis, president and ceo of mt. sinai hospital and the best investment ideas from some of america's top portfolio managers, steve romick of first pacific advisers at 8:40. becky has your morning headlines. >> just one we've been talking about just for the introduction, and here answer the ticker. >> because this is off the ticker. >> hugo chavez has been reelected as venezuela's president. this is the closest race he's faced in his nearly 14 years in office. he beat out his challenger by a 54-45% margin. back in 2006 he won by 27 points. his challenger capriles accused chavez of using the nation's oil wealth to his advantage, not surprising to anybody who has been watching what's been happening but the victory gives chavez a fresh endorsement of his socialist agenda, good news
for cuba, who have been close friends of his as well. >> good news for socialists everywhere. >> there you go. >> didn't mention any names. alcoa reporting third quarter results after the close tomorrow. predicting s&p 500 results would drop by 2.6%, snapping 11 straight quarters of gains since january of 2009. 78% of the companies have warned that is the highest negative outlook since 2006 and -- >> it would be amazinamazing. >> we know things are not great. we see the slowing economy but again maybe the analysts can get their ideas a little more lowered after all these warnings. >> the market is at a five-year high. that's the disconnect. i don't think it necessarily means the market comes down with the fed, you need more time for the fundamentals to come up beneath the market and that's the reason the fed is -- >> if you look at the u.s. it's the best house in a bad
neighborhood when you look around the globe where people are looking with the economies. in the meantime also a multibillion-dollar health care deal involving a dow component company this morning, unitedhealth, the newest member of the dow is combining with amil, brazil's largest health care company. unitedhealth will pay $4.3 billion in cash for 90% of the company's outstanding shares, the deal worth $4.9 billion when tax benefits are included. they expect the transaction to accretive to earnings in 2013. lelt answer get a check on the markets this morning. we're seeing red arrows. the dow futures down by 46 points, s&p futures off by close to 9. overseas in asia, red arrows most of the way. hang seng down by 187 points. in japan the nikkei closed down.
concerns about the global economy and what to think of greece and spain right now in france the cac is off by 37 points a drop of about 1% and in germany the dax is down by 1.2%. the for the fourth straight year the u.s. government ended its fiscal year with a deficit over $1 trillion. joining us wob b ris robert wol. member of the president's council on jobs and competitiveness, we say he's one of mr. obama's favorite bankers. before we get to the deficit and all of the debates last week. were you depressed, unhappy, miserable? give us an adjective. >> well one, i'm not depressed. i see joe smiling. he's not going to yell at me today. >> there's a number of polls, an enthusiasm gap. >> i wouldn't say that. governor romney had a very good debate, no question, he put on a
great show, but to me i think we should be focusing, this is a business show on friday's unemployment number, which was a great number, and not a surprise, based on what the economy's been doing over the last three years. >> 114,000 is not a great number. >> 140,000 on average over the last six months. >> what came out on friday was below expectations for 114,000. >> you know what revisions has done each month so we should look to see where the revisions are. i think if you look over this year, you're averaging about 140,000, i think we should -- >> 140,000 is anemic and not enough to bring down the rate even though it has somehow. >> i would look at it differently. i think over the last three years the first thing that gets jobs going is you got to increase the average hour work week. we're now at a prerecession level. once they fill that void then you start hiring again, over the last three years -- i know, joe, you're waiting to -- >> no, even people that say -- >> joe if i could finish for 30 seconds? >> we have more to go. you at least admit that.
>> absolutely. i'm not saying it's blockbuster. give me the 30 seconds. >> you have 30 seconds all yours. >> over the last three years you have manufacturing up, you have the housing foundations starting to be built certainly not where we want it to be yet but starting to have a good foundation, foreclosures are down, you have foreign direct and exports improving. it is getting better but not near where we want to be. the unemployment coming down seems to make sense. >> have you talked to the president since the debates? >> no. >> if you did talk to the president before the next debate, what would you tell him? >> i would probably say to the president, talk about all, talk about your vision that's been working. >> be more aggressive? >> listen, i've played basketball with the guy. he's the guy who likes the ball in his hands. i would tell him take the ball in his hands. >> some decided he was not playing ball last wednesday. >> i'm not a debate
professional. i've been advising him on the economy and i think actually the trajectory is in the right direction. this debate, listen, romney had a great performance, i would actually challenge a lot of the facts but that's for a different show, possibly, but i think at the end of the day it's one day. we could go back to romney's 47% where that was 30 days. this is one day, let's see what happens the next week and the next week and we'll all have a vote coming up in the early november. >> you challenged me when i mentioned this enthusiasm gap and chuck todd was on "meet the press" over the weekend showing some startling numbers about both from an age perspective, minorities, that there is a distinct gap in terms of the enthusiasm to get out to the polls and vote. >> i think four years ago there was a 20-point, the democrats had a 20-point lead in enthusiasm gap and now it's a seven-point lead for the republicans. >> i don't look at the polls like everyone studies it, but i looked at where he was in wisconsin the other day and he had 30,000 people there, and it
seemed like it was 2008 all over again. i'm not questioning the excitement's different in '08 than today. that's factual. >> tell us the experience on the money side. you raise money for the president. there's still money to be raised. what kind of feedback are you getting now? >> well i think the number just showed he raised 180 million for the last month which is maybe one of the best months in presidential history and i think more importantly, it's from a grassroots level, the average thing was like $53. >> have you had any wall street people change their mind, shift their view especially this is what i was curious, given that the polls up to two weeks ago seemed to be going his way, whether there are folks on wall street who said to themselves i might have to deal with this guy for the next four years. i've been bashing him but i have to play both sides? >> you know i think wall street's not that dissimilar from where the country is. seems like 47% are republican, 47% are democrat, and then everyone's trying to gauge the 6% in the middle, and i think
that's to be determined. the polls are tight and you know, let's see what happens the next 30 days. there's another debate coming up. >> are you guys going to hold hands now? >> unwf the thinone of the thin surprise something how different the facts can be presented about the economy. you said the economy is going in the right direction. the truth is, exports are now fading, manufacturing jobs are being lost, poverty is the at the highest rate in 60 plus years, small business creation at the lowest point in 40 years. private job creation is deceleratin decelerating. >> i would challenge those facts because one, we've had double-digit increases in exports for every year that president's been in office which is the first time in decades opinion. >> they're starting to decline. >> you're looking aa monthly basis. manufacturing is the best since the early '90s. if we started talking as
businesspeople. >> look at the second half. >> well then obviously there's no way the unemployment numbers could be wrong because manufacturing was down, you think he put that down, too? >> i don't think there's a conspiracy by the way just to be clear. but i think private job creation is clearly decelerating. more people are taking part-time work who want full time work. we have low labor rate participation rates. small business creation is going down. those are all facts. >> but the facts are versus the last 31 months we have hey over 5 million jobs created, if you look at the average -- >> go back to his full presidency, why do you do 31 months? >> go back to the full presidency. >> i accept that number. >> we also have to include the average hour work week which was up an hour, another 2 million job elive equivalents.
>> during the debates, not the president but mr. romney did was go directly after the banks. are you surprised by that? >> five banks actually he went after. >> some of your pals and some people you've worked with. i thought both of you would have views. >> it's absolutely right, it's crazy to declare five banks too big to fail and also correct community and regional banks are suffering and they had nothing to do with the meltdown on wall street. >> his facts are incorrect. it's not five, it's more like 40 and the systemically important institutions has not yet been fully defined yet and may not only include banks. so i think when you say five banks those are the five largest banks but it's not the ohm banks being focused on. ask aig when they pay back if they're focused on by the fed now. so the facts were just wrong that he gave a great show but his facts were wrong.
>> you know what my favorite moment in the entire debate was? >> what's that? >> when president obama said for the thousandth time he's going to stop the tax break for shipping jobs overseas. governor romney said i've been in business for 25 years and i have no idea what you're talking about because president obama didn't know what he was talking about. >> he'll come back with a different debate putting money overseas, i think he took the high road on that one. >> robert we have to leave it there. thank you for coming here and congratulations on the new row, reuters online. david rubenstein this week? >> yes, on thursday and mentioned your "new york times" article. thank you for having me on. >> thank you, absolutely. >> nice to meet you. >> nice to meet you. when we come back repairing america's health system with dr. ken davis, ceo of mt. sinai hospital. and brian shactman joins us from the third casino to open in ohio in less than a year.
brian? >> reporter: well, becky, right behind me we have about 3,000 slot machines and more than 70 gaming tables, part of a national trend, the casinos in for jobs and tax revenue and for a company like penn national gaming it's about the bottom and top line. we'll talk to their president and coo next on "squawk box." [ horn honks ] hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important. well, both are important. let's be clear. they are but this is important too. [ man ] the receivables. [ male announcer ] michelin knows it's better for xerox to help manage their finance processing. so they can focus on keeping the world moving. with xerox, you're ready for real business.
is this just gambling? >> it is gambling. they have a convention center where they'll do other things but in terms of -- listen, people that gamble are taking money they could save and invest and they're gambling it. they'll have one in cincinnati by spring of 2013, coming to your town as well. ohio will go from no casinos to four in a year and a half. in terms of overall tax revenue about $8 billion was raised from casino gambling in this country and penn national gaming is opening this one, the hollywood
casino in columbus today, it's their second one. we bring in tim wilmont, president and coo. why are you of confident as your second one in ohio this will be a good return on investment? >> we opened in toledo in late may with a $320 million investment and $400 million investment in columbus. there's only one other casino. we think the investment will generate great returns for shareholders and there's no other casinos besides the other one down the road. we don't expect any other competition in the foreseeable future. >> having said that we had reports of two that opened in cleveland and toledo, have already seen month over month declines in revenue. aren't you worried when you go zero to four you might be cannibalizing why you have? >> absolutely not. there's a honeymoon period where
revenue is left and we see a drop off and it will pick up again. look at the state of pennsylvania about the same population as the state of ohio they already have 12 casinos, going to add two more and doing very well. we think there's no concern about saturation here in the state of ohio. >> when it comes to taxes, 33% of all casino revenue in ohio is taxed at a rate of 33%. this is also a jobs story as well, talk about the jobs impact of this particular casino has had. >> when we passed this in 2009, jobs was a key message. this investment here created 3,500 construction jobs and we're going to open today with 2,000 full time and part-time jobs. that was the big message that passed in '09. we're delivering on the promise. >> joe they said they had 56,000 applicants for 2,000 jobs, it's easier to get into mit than it is to get a job at the hollywood casino here in columbus. the story is about the states and municipalities trying to get more tax revenue and turning to casinos and you've been in the
gaming industry for a couple of decades now. is it easier to get a project like this done in 2012 than 200012347. >> there's no question. we passed the referendum statewide in 2009. previously four times the state of ohio voters failed to pass it. the fifth time with the economy as it was in 2009 got the message across that jobs was going to be the answer to passing this initiative and it finally passed the fifth time. >> do you feel like, is there anything on the back end of this? we talked about sin for salvation and joe kernen talked about what else is there for sin outside of gambling that the people that are here are the people that maybe shouldn't be gambling, a sense of irony in the great recession we're getting tax revenue from maybe the people that need the money the most. >> as an industry we take seriously the poshs of making sure people don't have a problem gaming. we spend a lot of money on research and treatment. it's a very small percentage of the population that has that problem. the vast majority of people that come here look at it as a night
out, entertainment, spend their $100, have a dinner at one of our restaurants and enjoy live entertainment. we feel comfortable we're offering a safe environment for consumers. >> people look at penn national gaming, what differentiates you from your cohorts in this space? >> we think given our conservative balance sheet and ability to invest capital wisely we get great returns on investment. there's $400 million here, the $320 million will be great returns. race tracks moving from toledo and here in columbus up to youngstown, they're going to be great investments. we' we're disciplined in allocating capital. >> it's a 3.25 billion market cap. back to you. >> they are good jobs, though, ryan, you can see why people want, working in a casino, it beats digging ditches. how many, 58,000 applications for 2,000 positions? >> right. i don't think you can get in,
joe. that's right. and the wrinkle here, we ran into a couple in pennsylvania, it's a smoke-free floor, too, which is actually good because this is the only suit i have on the road and i can't have it stinken up on my way home. >> i'm not sure what you're talking about the poor conventioneers where the real sins are committed. appreciate it, thanks for the report. go down and say hi, go to reds country if you get a chance, must be a lot of excitement. >> i will. good win for you guys, yes, absolutely. >> right, thanks. see you. coming up, reducing health care costs and increasing the level of care, that's the challenge health administrators are facing aed half the presidential election, dr. ken davis, president and ceo of mt. sinai hospital will join us at the bottom of the hour and "squawk" tomorrow we'll talk health care and politics with ken langone, chairman of invemed associates. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan,
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action, now allowing winter blend gasoline to be sold in california about three weeks earlier than usual to try to bring down the prices. the dramatic surge came after a power outage last monday at a southern california refinery that reduced supply. the refinery came back online friday and prices are expected to stabilize in the coming days. a "squawk" sports report for you. ♪ the college football rankings have been updated and the rutgers scarlet knights are ranked 20th in the ap poll, number 19 in the "usa today" poll after beating uconn 19-3 and the knights are now 5-0 with syracuse next on the schedule. when we come back the presidential candidates battling over health care at the debate last week. >> it will cost $2,500 a year more than traditional insurance. >> if you repeal it, what happens is those seniors right away are going to be paying $600 more in prescription care. >> up next, with he will talk health reform with dr. kenneth davis, the ceo of mt. sinai hospital. "squawk" will be right back.
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company amil. and a house intelligence committee reports china's two top telecom makers should be kept out of the market. huawei and zte, following an 11-month investigation of the two firms. nationwide gasoline prices have barely budged, despite california's price hike. putting the average price $3.84 per gallon, up a half cent. other than the west prices were down about 3 to 12 cents. joe? hi, andrew. you're kind of interrupting me right now, i was talking to dr. davis. >> you were in can frgs? conversation? >> yes, i was. i thought we had the headlines and needed to -- >> you were talking cancer research. >> serious stuff here. >> what i was saying, dr. bob
weinberg in that group postulated the existence of an onca gene and said we will find one and we know how many have been found at this point. dr. ken davis president and ceo of mt. sinai hospital and it's good to see you and just in passing we talked about a couple of things, the prospect for alzheimer's, and preventative medicine and using what we're learning on the lab bench to tackle health care we could do unbelievable things if we found a couple of things that could be more than just palleted. >> i think you're right. if we could begin to align the health care agenda and the scientific agenda in the country, i think we can do a lot better. if we could recognize how much cost alzheimer's disease and other chronic diseases like type ii diabetes is to the health care system then we could say to the nih we really need a larger effort in this. then we could say to our legislatures, what are we going
to do around patent law that will incentivize companies to develop drugs in this area. we could do a lot more. >> that's what i wanted and whether it's the if,fda or pate law, what is coming up the works. >> in cancer there's extraordinary developments. decades ago we started a war on cancer and people have been appropriately disappointed with where are the big break-throughs. the big break-throughs are about to happen. thanks to what we've learned about genetics and the large studies done across tens of thousands of people, we're identifying that there are a series of mutations, many different mutations that can lead to what looks like the same cancer but it's not the same cancer. there are lots of different kinds of, evidently a lot of different kinds of colon cancer, of lung cancer, of prostate cancer, and we can go on and on. >> does that mean five to ten years we'll be able to battle back at some of these killers? >> i think so. what happens is all those
mutations provide new targets, and those targets are all accessible for drug development. so i see the possibility that we're really going to make major break-throughs here around cancer biology. i'm a little less excited about what we're going to do in alzheimer's disease and here's the reason. what we now know about alzheimer's disease is that the change in your brain the plaques and the tangles that ultimate leelead to brain failure could be happening 25 years before they're symptomatic, could be happening to me and you right now and we don't know it. we could get an amyloid scan and get an indication we're starting to have plaques, that means we have to give the drugs 15 to 25 years before people are symptomatic. now imagine if we start to do clinical trials that have to take 15 years before we have an answer. there's no patent life at the end of that so there's no incentive. >> there's an argument for
patent law change if you can find something, maybe there's something genetic that could help know you are more likely to be affected by this. >> right, but what we'd really like to do, i would propose is to say if you're going to be the first compound for alzheimer's disease, that really alters course you get 12 years of exclusivity for that drug no matter what the patent live is. do that in other parts of the world for first of a kind break-through drug and we would identify the break-throughs to bend the health curve. >> it's common sense, and as a cancer survivor i'm delighted to hear you say you're excited about progress in cancer but it's such common sense when you say let's align the scientific agenda of the nation with the big cost drivers in medicine. >> yes. >> and of course patent law, et cetera. what would it take to align the scientific agenda and the cost drivers in health care? who would do that? who would cause that to happen? >> well, the congress has been
very responsive to patient groups that meet with him and make i think a compelling case for why their disease is special. i think if we can get those groups to also talk with an administration, also talk with the nih, form some kind of consensus between what the country needs and what the patients need, perhaps we could do it. >> because there's now at least unanimity it would seem to me about very little but there appears to be unanimous agreement about the top five diseases, chronic diseases, that are cost drivers in health care, there seems to be agreement that we need to do something to preventative, to incentivize the right behavior, so it seems as though we're closer and yet perhaps it's the election season, but to me it feels like we're further and further away from agreement on what it takes to actually get the health care system moving in the right direction. >> part of the issue in the scientific budget is right now,
93 out of 100 grants that are applications for new science are turned down because there isn't enough money for all the science that's possible. now as long as we're under the kind of fiscal constraints that we are and nih doesn't have the priority it might otherwise have, we're going to have most of our grants not funded. and when there is so much good science out there, it's hard in an environment in which you're saying essentially nine out of ten grants are unfunded that we should fund fewer for some of the science that isn't directly relevant to what may be the cost drivers in health care today. >> so we need more money in r&d. >> r&d is hardly the answer. >> getting back to cancer cure, what is the overriding conclusion we're coming to, since there are so many different cancers. an individual could have a cancer specific to his own genotype. is it trying to find something on the surface of the cancer cell recognized by the immune system, will that be the best
way to do it? >> i think the best way to do it is going to be a genome scan of your cancer so that we can find the mutation in your cancer and give you targeted therapies. >> how do you deal with that, killing the cancer you have? >> killing the cancer. >> you have to find it, see what's expressed on the surface and kill it with your own immune system? >> you might be able to do it that way. what you want to do is normalize the mutation that's causing the cells to become out of control, and there are so many different ways that can happen, we've just got to identity it and not hit it with a sledgehammer but hit it with, you know, a specific. >> like a nuclear bomb, with a snipe per. >> scalpel. >> really be specific. that's on the horizon. >> so many things. and rightly so, and when did we sequence the genome, 15 years already? >> it was in the clinton administration, and you know, now we're really reaping the benefits of that. >> and you think that, i remember there was a merger
between smith klein and glaxo, taking chemistry and genome and putting it together and i thought in two years we'd be living to 3,000 years old. didn't happen, nothing goes from the lab bench to the bedside. takes so long. >> takes more time than we'd like. you've got to show it's safe, got to show it gets to the right place. >> and there are so many side effects to all of it, profile is huge for all of these things and getting to the point where it needs to get as well. all right. you shouldn't be here, you should be back there doing something i think, right? anyway, go work on something. thank you for coming in, we appreciate it. >> good to be here. >> thanks, doctor. when we come back all this week we've been bringing you interviews with some of the country's top performing fund managers, they'll bring you their best investing ideas and tell what you is working in their portfolios now, that is right after this. steven romick is the portfolio manager at first pacific advisers, he will join us from los angeles and "squawk" will be back. "squawk box" is on facebook. "like" the show and get updates,
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that powers sound decisions. duff & phelps financial advisory and investment banking services. welcome back to "squawk box." futures right now are down 40 points or so, they've been all day. walmart and american express, two dow components teaming up in hopes of grabbing a share of the prepaid card market.
blue bird prepaid card at walmart stars. big bird is yellow, this is bird. following a year of testing, it's pitched as a low cost alternative to traditional checking accounts. >> you say blue bird and i think twitter. >> the little guy. >> tweet, tweet, tweet. trademark. anyway. this week we are featuring a selection of the best mutual fund managers and their top fikz. today the five-star rated fpa crescent fund up 19% over the last year and posted annualized returns exceeding 9% over the last decade. joining us from is steve romick, portfolio manager of the fda crescent fund and manager of first pacific advisers. thank you for joining us. >> thank you. >> impressive returns that you have not only over the last year but particularly over the last decade to be able to wrack up returns like that. you say the real secret to investing is trying to find
investments that are more risk-free, not necessarily trying to beat the market. you want to explain that to us? >> well, our goal is to provide equity rates of return with less risk than the market. our goal is not to seek that which is risk free, but we do believe that we can accomplish delivering those types of returns by kind of investing across the capital structure so what we do might be different than the average mutual fund, we're not just bonds, not just stocks. we diversify across a whole different basket of asset classes. equity is the largest component. we do a lot of high yield bonds, we own mortgage home loans and farmlands and a smattering of relatively odd things by comparison. >> your bond position in the chart we looked at was only 3.7%. you think now is not the time for bond investing. >> corporate bond investment certainly isn't as far as we're concerned. the last couple of years $80 billion some odd of triple c and non-rated debt issued which is larger than in 2006 and '07.
spreads don't look unusually narrow. at the same time that you have the starting yield which is quite low. so you're not getting paid to play if you're buying what they call high yield bonds that aren't high. >> let's talk about some of your favorite picks. you like renault and i guess that's unusual because people think europe and they think about all the distress that's happening there. >> what we generally tend to do is look for dislocation of markets. we're looking for that which is out of favor and a lot is out of favor in the european automotive business. in the case of renault they own stakes in nissan, 44% stake there, and 7% stake in volvo and if as well as a less than 2% stake in daimler. you add up the stake of the companies which are all public they exceed the value of renault so you can actually be long renault as we are and we are short volvo and nissan not because we have a negative view as to volvo and nissan's prospects but because volume sew and nissan's value exceeds
regnr renau renault. the market is paying us 2.5 to 3 billion euros for so. >> we had a conversation with the doctor who runs mt. sinai and he was talking about promising things coming down the road. one of the things you like is om omnicare and the institutional pharmacy business. what do you see happening there? >> this is not about something new and exciting and promising coming down the road with respect to technology that is going to drive us into invention in this business but the omnicare business is an institutional pharmacy and they deliver drugs to nursing homes amongst other places as well. nursing homes is a big part of the business and they have more than 40% share, three times the nearest competitor and this is a business that is going to benefit from certainly the aging of america but as important in that, as that is the fact there's a new management team here and this is a business that was not terrible well run in the past, this is a business that was poorly managed and now the new management team, making the appropriate investment in
people, as well as technology, they are going to increase the wide and deep competitive mode they have. >> does it matter who wins the next election and whether or not obama care sticks around for that pick? >> that will not affect us. we think in terms of elections and what could happen coming up, if any investment we made would be too dependent upon one party winning then we wouldn't be making that investment. >> you also like farmland. could you explain your thesis there? >> farmland is something that you really don't find in most mutual funds and we unfortunately couldn't when we first were buying this own as much as we wanted to because of the liquid nature of it, but farmland is going to benefit in a few different ways. one you could look at the benefit that people think gold have and pharma will benefit in ab an inflationary market and with the currencies but unlike gold
it doesn't have a cost of carry. farmland, if you look around the world the population growth is 0.9% and arable acreage over 2.3. people are feeding more in developed economies and emerging economies are eating better, means more proteen in their diets. that gulf between 0.3 and 0.9 widens further still and there is continued to be decelerating productivity improvements on land, so there could be a point in time where we end up with much higher food prices even with what we see today. >> steven thank you for coming on and hope to see you again soon. >> thank you. coming up don't start your trading week without a healthy dose of jim cramer. we'll head down to the new york stock exchange to talk to him, after this short break. ready or not, the stock of the day is coming up, you're watching "squawk box" on cnbc.
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let's get down to the new york stock exchange where jim cramer joi joins now. we've been talking about this "financial times" article. where are you on this? >> "usa today" had a very good piece about this, too. this is a period where we peaked in earnings. and what's happened is that unless it's totally domestically related, governor rendell had good insight, unless it's domestic housing, unless it is auto, you're just not going to do it. people are trying to ratchet down expectations ahead of the quarter. but we peaked because europe got weak and companies like caterpillar and bank of america saying they're not going to make the quarter. there's a lot of that out there. >> and therefore you do what? >> you fall back on yield. you have company that is gi you a better rate than the cds, many
are international companies in health care. we're going to see a transaction translation, a lot of the numbers we thought were going to be bad because of currency will be good because a lot of companies pegged the euro at 1.29. that's going to be the saving grace. you're going to retreat back to yield. that's going to work. >> let's talk hp. any hope at all? >> no. no. >> zero? >> look, there's a generation coming up. that generation does not know hewlett-packard. it does not know dell. it knows apple. those people will be in positions of power within the next five, six years. so the idea that it doesn't matter that jobs created a company that has pizzazz, that has heat, is just wrong. there are a lot of i.t. people who are going to lose their jobs because they back hewlett-packard and dell. we're going to try to figure out
why they ever went with hewlett-packard and why they went with dell. this is the world that we're coming to. but hewlett-packard will not admit that because no one ever wants to say the magic word. apple's got the better mousetrap. >> i think jim is raising the great point of why companies haveless time today than they did in the past. the competitive marketplace moves so quickly now that perhaps you could say ten years ago that you have five years to turn things around. but no one has that kind of time right now. that's why i think strategic alternatives have to be on the table. >> totally right, carley. whenever you go to a meeting with any ceo, they bring out their ipad. >> me, too. >> right. i have companies that tell you, listen, you have to play with hewlett and you have to play with dell. if you get to the i.t. person, they are using apple. but the deal's been cut, whoever is doing i.t. that says you have
to own dell and hewlett-packard, they have children. and their children laugh at them. >> we're going to leave it there, jim. nice note, sort of, to leave it on. but anyway. we'll see you in a few minutes, jim. >> thank you. when we come back, we have the stock of the day and closing shots from carley. stick around. we'll be right back. [ male announcer ] the 2013 smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. which can withstand over three and a half tons. when you take a closer look...
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the lead story in "the wall street journal" today is all about how a congressional investigation has found that whileway technologies is a national security threat and has likely broken u.s. law. they're advising u.s. companies not to do business with them. that's a huge step. >> it's a huge step. it's the right step. i'm delighted that they made that finding. i think there's no question the finding is correct. and i think the only way to deal with china going forward is to be forthright about putting pressure on what they perceive to be their economic self-interest. it is the only thing the chinese respond to. there's no question they've made a habit of stealing intellectual property. there's no doubt in my mind that an enterprise of that size is aligned with the chinese government. good for us. we've woken up to that. now we need to keep the pressure on the chinese government to play fair if they want to be in
the wto and be a global trading partner. >> used to be the chinese were the biggest buyers of our treasuries. obviously now the fed's beating them out. if you look at the chinese as owning so many of our treasuries and in the past talking about how they would use warfare from a financial perspective against other nations. how much do we need to worry about that and how we deal with them? >> obviously it's a very trickily situation. i personally think governor romney laid out a fantastic test in the last debate when he says, does a government program justify borrowing more money from the chinese? i think that's how we should be thinking about it -- >> he did it with big bird. >> on the other hand, we cannot be afraid to deal with china as an equal. the chinese are very commercially minded. they are focused intently on growing their economy and creating jobs. we have leverage in this relationship as well. but we have to use it. and i don't think wee